Spaniards Take To Streets To Block Home Evictions03:58

Olga Veloso protests banking giant Bankia last month in Madrid. Veloso and her neighbors have twice blocked bailiffs from evicting her from her apartment after she lost her job and stopped paying the mortgage. (Reuters/Landov)

For months, demonstrations have been popping up on otherwise quiet residential streets across Spain. The protesters form human chains, forcibly blocking bailiffs from evicting residents who've fallen behind on their mortgages. Sometimes the protests turn violent.

The demonstrations are another sign of just how pinched people are feeling as Spain's economic crisis continues to roil. With Spanish unemployment above 25 percent, hundreds of people have been losing their homes each day.

Protesters recently jostled with police outside the Madrid home of Olga Veloso, who stopped making payments on her apartment when she lost her job as a janitor two years ago. She's been served eviction papers twice.

"A judge came with the police to demand the keys to my home," Veloso said. "But thanks to protesters and my neighbors, we all blocked the door and prevented them from entering. We stopped them twice, and I'm preparing for the third time."

But she hopes there won't be a third time. Things are looking up for homeowners here because Spain's Cabinet is expected to vote Thursday on historic changes to the country's mortgage laws, designed to keep defaulters in their homes longer.

Banks themselves have already declared a two-year freeze on evictions of Spaniards who are in "extreme" conditions. The move came after 53-year-old Amaia Egaña of the northern city of Bilbao threw herself from her fourth-floor window Friday and died as bailiffs were climbing the stairs to evict her.

The moratorium is limited to "cases of illness — serious ones — cases in which people are dependent on others, cases in which people are elderly, or have young children," explained Miguel Martin, president of the Association of Spanish Banks.

Even After Eviction, Debt Continues

For weeks, protesters have gathered outside the Madrid headquarters of Bankia, Spain's largest property lender, which went bust last spring. Bankia and other lenders are getting up to $125 billion in bailout funds from Europe.

Meanwhile, longtime Bankia customer Melchorita Garcia is asking for just a little leeway on her $500-a-month mortgage payment. All she's gotten is an eviction notice.

"I'm really scared," Garcia says. "I'm so worried about what will happen and where I'll go if they take away my house and leave me in the street."

Garcia hopes for relief under the new moratorium on evictions. She also lost her job, and her 14-year-old son, Miguel, has autism. She breaks down as she reads a letter from the boy, begging her loan officer to allow them to stay in their home.

"I don't like to see my mother so sad, suffering without work, with all the people lined up outside the bank," the letter says. "It's very cold there. I hope you grant my wish. God will not abandon us. Sincerely, Miguel."

Eviction is a devastating thing for a family anywhere. In Spain, it's compounded by the fact that borrowers can't walk away from a mortgage and declare bankruptcy, says economist Gayle Allard, at Madrid's IE Business School.

"You walk away and you still owe money," Allard said. "You lose your house, but you still owe money to the bank — which Americans, you know, we would find that outrageous."

Spanish lawmakers are reviewing that rule and others this week, in hopes of granting some relief to borrowers.